Kentucky Drug and Alcohol Inpatient Treatment Licensing

Author: A. Ant, CADC-II, Licensing & Accreditation Expert

Disclaimer: This content is provided for general informational purposes only and should not be construed as legal, regulatory, or licensing advice. Requirements change frequently. Consult qualified professionals for guidance specific to your situation.

Apply now: “AODE Initial Licensure Application” in the online AODE system on Kentucky Online Gateway (DBHDID instructions, PDF) | Questions: AODE Help Desk, 502-564-0104 Option 4 or 866-231-0003 Option 4, chfs.aodehelpdesk@ky.gov

Count your beds before you count anything else. Kentucky’s Certificate of Need law exempts a licensed free-standing residential substance use disorder program with sixteen or fewer beds, and the exemption stops at that number. Add a seventeenth bed, or build a hospital-style chemical dependency unit, and the project goes through CON review before a license is possible. The other thing out-of-state operators miss is who issues the license. Since April 5, 2023, residential programs licensed as alcohol and other drug entities (AODEs) answer to the Department for Behavioral Health, Developmental and Intellectual Disabilities (DBHDID), Division of Program Integrity, not the Office of Inspector General that handled them for years.

This guide covers adult residential treatment and residential withdrawal management. Outpatient levels are in Kentucky Drug and Alcohol Outpatient Treatment Licensing. For mental health licenses and the rest of the state’s categories, start with the Kentucky Behavioral Health Licensing overview.

Two Inpatient Routes, Two Different Agencies

The agency transfer and both rule chapters below come from CHFS pages and the Kentucky Administrative Regulations as posted by the Legislative Research Commission.

The CHFS Office of Inspector General (OIG) applications page says it plainly: “Effective April 5, 2023, AODE oversite transitioned to the Department for Behavioral Health.” DBHDID’s Substance Use Disorder Program Licensure Branch now licenses nonhospital residential programs under 908 KAR 1:370 (general requirements and fees) and 908 KAR 1:372 (residential). The residential rule recognizes clinically managed residential withdrawal management, residential treatment, family residential and residential transitional living, plus an adolescent program this guide doesn’t cover. The rule defines residential as “a setting that provides twenty-four (24) hour structure and support.”

OIG still licenses a second kind of inpatient addiction program. A chemical dependency treatment service under 902 KAR 20:160 runs a structured inpatient program that can “Be hospital based or freestanding,” keeps stays under 30 days, has 8 or more beds, works under physician medical direction, and must have nursing available on a 24-hour basis plus at least one full-time RN on its roster. Medically managed intensive inpatient withdrawal management (902 KAR 20:111) has to sit inside one of those programs or a hospital. KRS 222.231 keeps the two tracks apart, since its licensing requirement doesn’t reach a program already licensed as “Chemical Dependency Treatment Services” under KRS 216B.042.

Item	Residential AODE	Chemical dependency treatment service
Licensing agency	DBHDID, Division of Program Integrity	CHFS Office of Inspector General, Division of Health Care
Rules	908 KAR 1:370 and 908 KAR 1:372	902 KAR 20:160 (plus 902 KAR 20:111 for medically managed withdrawal)
Filing	Online AODE system on Kentucky Online Gateway	OIG paper application
Medical staffing in the rule	Medical evaluation and consultation available 24 hours for withdrawal management, no medical director named	Physician medical direction, 24-hour nursing, at least one full-time RN
Certificate of Need	Exempt at 16 or fewer beds	Required, in our reading
License fee	$500 a year	Set in OIG’s fee schedule, which we did not confirm

The Sixteen-Bed Line and Certificate of Need

The statute language here is quoted from KRS 216B.015, 216B.020 and 216B.061. Which projects fall on which side of the line is our reading of those three sections together.

Under KRS 216B.061, a new health facility, or a substantial change in an existing one’s bed count, cannot go forward “without first obtaining a certificate of need.” The definition of health facility in KRS 216B.015(13) names “chemical dependency programs” and “includes alcohol abuse, drug abuse, and mental health services.” The relief comes in KRS 216B.020(1), which exempts “licensed free-standing” “residential substance use disorder treatment programs with sixteen (16) or fewer beds.” We found no sunset on that exemption.

So a sixteen-bed residential AODE skips CON entirely, in our reading. A larger free-standing program does not, and neither does any bed licensed under 902 KAR 20:160. Kentucky’s 2025 Update to the State Health Plan (incorporated by 900 KAR 5:020 in January 2026) caps chemical dependency beds at “a maximum rate of 11.4 beds” “per 100,000 geographic population for the plan year,” and it defines those beds by reference to 902 KAR 20:160. Whether a residential AODE over sixteen beds would be measured against that same bed need figure or reviewed some other way is something we could not settle from the plan text, so ask the OIG Division of Certificate of Need before you design around it. The filing fee schedule in 900 KAR 6:020 charges a flat $1,000 for projects spending nothing or no more than $200,000, half a percent of spending between that and $5,000,000, and $25,000 for anything larger.

A 2025 bill that would have exempted chemical dependency treatment from CON, HB 531, was referred to the House Health Services Committee on February 21, 2025. The legislative record shows no action after that referral and no Acts chapter, so the bill died in committee.

ASAM Criteria Without ASAM Level Numbers

Kentucky’s AODE rules require assessment “based upon the most recent version of The American Society of Addiction Medicine (ASAM) Criteria” (908 KAR 1:370), yet 908 KAR 1:372 never assigns a 3.1, 3.5 or 3.7 label to any residential program. The license names a program type, and a referral source reading it learns nothing about level. A program that wants a level on record can get one from CARF. Its ASAM Level of Care Certification page states that certification “is available for adult Levels of Care 3.1, 3.5, and 3.7,” and ASAM’s own page says CARF runs the surveys for it. DBHDID won’t print the result on a license. A hospital case manager deciding where to discharge a patient can check it anyway. CARF’s Find a Provider tool has a Certification filter, and ticking “ASAM Level of Care 3.7” (or 3.1, or 3.5) narrows the list to certified programs. In our view it fits Kentucky’s residential treatment program. A clinically managed residential withdrawal management unit gets nothing from it, because CARF and ASAM describe the certification only in terms of residential levels 3.1, 3.5 and 3.7. A separate ASAM certification condition in Kentucky Medicaid’s rules for residential providers is a reimbursement matter outside the license, and we don’t handle it.

What 908 KAR 1:372 Expects of the Building and the Shift

A residential AODE must be “staffed twenty-four (24) hours per day, seven (7) days per week” with “At least one (1) staff person on duty and awake at all times.” Group sessions are capped at 12 clients per clinician. On the physical plant side, plan for at least 120 square feet for each resident, a toilet and a sink per 8 residents, and a shower or tub per 15. Residential withdrawal management adds physician-supported protocols and “Availability of medical evaluation and consultation twenty-four (24) hours per day.” The rule sets no numeric adult staffing ratio and names no medical director.

The residential rule’s history line ends “Crt eff. 7-1-2026.” That marks a certification letter under KRS 13A.3104, filed when an agency tells the legislature a regulation will stay in effect without amendment. The text you are writing policies against dates from the 2019 rule and a 2020 technical amendment, and the certification carries a seven-year expiration of July 1, 2033.

Medication for Opioid Use Disorder in a Residential AODE

The AODE definition in 908 KAR 1:370 lists “Withdrawal management services, including medication-assisted treatment,” and treatment plans must cover, “If applicable,” “pharmacological treatment modalities to manage opioid use disorder.” Residential withdrawal management has to offer “Medication assisted treatment, provided onsite or through referral” (908 KAR 1:372), and residential treatment includes MAT education. We read the AODE rules looking for a clause barring refusal of clients who take MOUD and found none. Turning those clients away still costs a program its referral partners, in our experience.

A resident on methadone keeps getting it from a narcotic treatment program, which Kentucky licenses as a separate modality under 908 KAR 1:374, so the residential program needs a written arrangement with one that will continue the doses. Buprenorphine involves less paperwork. The X-waiver is gone, and DEA’s Dear Registrant notice of January 12, 2023 confirms that “all prescriptions for buprenorphine only require a standard DEA registration number.” One Kentucky rule hasn’t caught up. 902 KAR 20:111, which governs medically managed withdrawal in OIG-licensed units, still refers to a physician with a federal waiver for opioid use disorder medications, a credential that no longer exists, so we would ask OIG how it applies that line today. SAMHSA says naltrexone “can be prescribed and administered by any practitioner licensed to prescribe medications.”

Ketamine for Residents With Depression or PTSD in Kentucky

Neither 908 KAR 1:370 nor 908 KAR 1:372 says anything about ketamine. The licensing conclusions in this section are our interpretation. The nursing material comes from the Kentucky Board of Nursing’s own advisory opinion.

Kentucky licenses an AODE to run “the specific modality or modalities of treatment referenced on its application” (908 KAR 1:370), and the modality list (residential treatment, withdrawal management and the rest) contains no medication categories. A ketamine series for a resident with treatment-resistant depression would be part of that resident’s medical care rather than a new modality, which is how we read it. The risk is that DBHDID sees it differently and treats it as a service your application never described. Email the licensure branch at BHDIDFKFTProgramLicensureBranch@ky.gov with the protocol before ordering any drug, and keep the reply.

What the Board of Nursing Allows

Kentucky’s nursing board has addressed this directly. Advisory Opinion Statement #43 (issued February 2024, edited November 2024 and May 2025) puts subanesthetic ketamine for psychiatric disorders “within the scope of the RN who is educationally prepared and currently clinically competent,” provided a qualified provider directly supervises. Monitoring has to be continuous, and somebody certified in ACLS must be in the building for the entire infusion and stay until the patient is discharged. The narrative is blunt about practical nurses: “It is not within the scope of practice for the (LPN) to administer subanesthetic dose Ketamine.” The opinion’s summary grid reads more loosely on LPNs, which contradicts the narrative, and we would staff to the stricter text. A residential house built around one RN and several LPNs therefore can’t hand ketamine to the LPN on shift, and a 902 KAR 20:160 unit with physician direction and 24-hour nursing is the setting that already matches AOS #43.

DEA, KASPER and Prescribers

Because 21 CFR 1308.13(c)(7) places ketamine on the Schedule III list, our reading is that whoever orders it for residents should hold a DEA registration at the residential address. Under 902 KAR 55:110, dispensers and health facilities holding a DEA number must report dispensed Schedule II through V drugs to KASPER “no later than close of business on the business day immediately following the dispensing.” The Cabinet’s KASPER page settles the in-house question for practitioners, saying they must report “within one business day of administering or dispensing a controlled substance in KY,” so a residence that gives ketamine on site should expect to report each dose. An APRN needs a CAPA-CS before prescribing any Schedule II through V drug under KRS 314.042, with a Board exemption route open only after four years under a CAPA-CS. Esketamine nasal spray is a separate federal track. Spravato “can only be administered at healthcare settings certified in the SPRAVATO REMS program,” according to its FDA medication guide, which also tells patients a provider “must monitor you for at least 2 hours after taking SPRAVATO.”

Picking Residents

Ketamine isn’t an opioid use disorder medication, so offering it does nothing toward the MAT access 908 KAR 1:372 expects. A resident still in early withdrawal is a poor candidate, because nobody can separate drug effect from withdrawal noise. We would look at people whose depression or trauma symptoms outlasted stabilization and a standard antidepressant trial. Anyone whose own drug history includes dissociatives (ketamine itself, PCP and similar drugs) is someone we would leave out. Your medical director, not the license, sets those lines.

When the Resident Goes Home Mid-Series

Plan for the rest of the series to happen at an outpatient ketamine practice, and plan who owns it with care. In 1943 the Court of Appeals, then Kentucky’s highest court, decided Kendall v. Beiling, 295 Ky. 782, 175 S.W.2d 489. A jewelry corporation had put a licensed optometrist on salary to run its optical department, and the court reinstated the State Board of Health’s revocation of his license for helping the corporation practice without one. On the way there it wrote that “there is scarcely any judicial dissent from the proposition that a corporation cannot lawfully engage in the practice of law or of medicine.” The dispute itself was about optometry, so applying it to a lay-owned ketamine clinic today is our reading rather than anything the court decided. A 2026 resolution the Greater Louisville Medical Society brought to the Kentucky Medical Association leans on the same case. The cautious route is a practice owned by a Kentucky-licensed physician, with a separate management services organization handling space, staff and billing under contract, and a Kentucky health care attorney reviewing the arrangement before money changes hands. For what the outpatient clinic itself needs, read the ketamine part of Kentucky Drug and Alcohol Outpatient Treatment Licensing.

Kentucky added its own patient brokering crime in 2024. KRS 222.429 bars soliciting or receiving remuneration for referring someone to a treatment program and bars paying anyone “In exchange for an individual using the services of that treatment program.” Each offense is a Class A misdemeanor, rising to a Class D felony at $1,000 or more, and conduct protected under the federal exceptions in 18 U.S.C. 220(b) is carved out. The federal statute, 18 U.S.C. 220, covers non-hospital settings providing “residential treatment” for substance use “pursuant to licensure or certification under State law.” Each occurrence there can draw as much as $200,000 in fines and a 10-year prison term. Any arrangement between your beds and the clinic gets a lawyer’s review first.

Staffing a Kentucky Residential Program

908 KAR 1:370 requires an administrator for day-to-day operation and a clinical services supervisor, who can be an LCADC, one of the listed licensed professionals, or a CADC who has logged 4,000 hours of clinical work since certification. Clinicians can include LCADCs, CADCs, RNs and APRNs, and a case manager’s caseload can’t exceed 30 clients. Peer support has a hard date coming. HB 470 (2026 Ky. Acts ch. 80, signed April 10, 2026) says that “Beginning January 1, 2027” an AODE may “only employ an alcohol and drug peer support specialist who is registered under KRS 309.0831,” and it repealed the temporary peer credential. Check every peer’s registration before New Year’s.

Kentucky counselor pay runs below the national figure. BLS reports a statewide median of $54,190 for substance abuse, behavioral disorder, and mental health counselors (OEWS, May 2025), while the U.S. median in that release is $59,350, with Kentucky’s 25th and 75th percentiles at $41,730 and $72,590. A clinical services supervisor and five counselors paid at the state median come to roughly $325,140 a year, before overnight awake staff, nursing and benefits. Few residential programs in Kentucky carry that full number, because the state’s counselor credentials are built in stages. The Kentucky Board of Alcohol and Drug Counselors issues a two-year temporary CADC to applicants with a bachelor’s degree in any field, with supervision of at least 2 hours twice a month, and the LCADC asks for a master’s degree and 2,000 hours of experience. Put a clinical services supervisor in charge of temporary CADCs who are earning their full credential, pay them less than certified counselors while they log the hours, and the counseling payroll typically comes in 40 to 60 percent under what you would pay if every counselor already held the full credential. One RN directing several LPNs covers most nursing tasks, leaving ketamine and other RN-only work with the RN. We set the actual roster once the bed count and the withdrawal management decision are final.

Inspections and Accreditation

Accreditation is optional for a residential AODE. Its main licensing payoff sits in KRS 222.231(11), which says that for an agency “fully accredited by the Joint Commission, Commission on Accreditation of Rehabilitation Facilities,” COA or a comparable body, “the cabinet shall inspect the agency at least every two (2) years.” The rule hasn’t followed. 908 KAR 1:370 still says “An outpatient or residential AODE shall be subject to an annual survey visit,” unannounced, so in our reading an accredited program should still expect DBHDID every year. The statute also requires an inspection before the first license, and the rule says a program “shall not admit clients until the program has obtained a license” for each modality on its application.

How to Submit Your DBHDID Residential Application

DBHDID’s instructions point AODE applicants to its online AODE system on Kentucky Online Gateway (KOG), and an AODE needs a KOG account to use it. The flyer doesn’t say whether paper filings are still accepted, so ask the Help Desk if you were planning on one. Its instruction flyer says to complete an “AODE Verification Form” for each license first, then select “AODE Initial Licensure Application.” Renewals and changes later run through “Annual Re-licensure/Change applications” in the same system. The AODE Help Desk answers at 502-564-0104 Option 4 or 866-231-0003 Option 4, Monday through Friday 8 a.m. to 4 p.m. Eastern, and at chfs.aodehelpdesk@ky.gov. Licensing questions go to BHDIDFKFTProgramLicensureBranch@ky.gov.

The license fee is $500 and renews annually at the same amount (908 KAR 1:370). Residential programs can’t use the $80 extension sites outpatient AODEs rely on, so each residential location is licensed in its own right. A hospital-type chemical dependency unit applies to OIG instead, using the Chemical Dependency Treatment Service Application listed on the OIG applications page, after its Certificate of Need is in hand. OIG’s Division of Health Care is at 275 East Main Street, 5E-A, Frankfort, KY 40621, 502-564-7963.

Where Kentucky Residential Projects Stall

Older guidance is still circulating that tells applicants to mail an AODE packet to OIG at 275 East Main Street. That instruction stopped being right in April 2023, and in our experience a packet sent to the wrong office costs weeks before anyone redirects it. The other setback we see is a bed plan drawn at 18 or 20 to improve the economics, which turns a CON-exempt project into one that needs a certificate first. Settle the bed count before the lease.

Frequently Asked Questions

Deciding between a 16-bed AODE and a bigger build that needs CON? We can talk it through.

Sources

• CHFS Office of Inspector General, Division of Health Care: Applications page (AODE transfer to DBHDID, April 5, 2023) (checked October 14, 2026)
• CHFS OIG: Division of Health Care contact list (PDF) (checked October 14, 2026)
• DBHDID: Division of Program Integrity (checked October 14, 2026)
• DBHDID: AODE online system flyer (PDF) (checked October 14, 2026)
• 908 KAR 1:370: Licensing procedures, fees, and general requirements for nonhospital-based AODEs (checked October 14, 2026)
• 908 KAR 1:372: Licensure of residential alcohol and other drug treatment entities (checked October 14, 2026)
• 908 KAR 1:374: Licensure of nonhospital-based outpatient AODEs (narcotic treatment programs) (checked October 14, 2026)
• 902 KAR 20:160: Chemical dependency treatment services and facility specifications (checked October 14, 2026)
• 902 KAR 20:111: Medically managed intensive inpatient withdrawal management (checked October 14, 2026)
• KRS 222.231: Licensing of substance use disorder programs, inspections (checked October 14, 2026)
• KRS 216B.015: Definitions, health facility (checked October 14, 2026)
• KRS 216B.020: Certificate of Need exemptions (checked October 14, 2026)
• KRS 216B.061: Actions requiring a certificate of need (checked October 14, 2026)
• 900 KAR 5:020: State Health Plan (checked October 14, 2026)
• CHFS: 2025 Update to the State Health Plan, January 2026 (PDF) (checked October 14, 2026)
• 900 KAR 6:020: Certificate of need filing fees (checked October 14, 2026)
• 907 KAR 15:022: Behavioral health services organization reimbursement rule (ASAM certification condition) (checked October 14, 2026)
• Kentucky General Assembly: 2025 HB 531 bill record (checked October 14, 2026)
• 2021 Ky. Acts ch. 125 (KRS 13A.3104): Administrative regulation certification letters (PDF) (checked October 14, 2026)
• 2026 HB 470: bill record and 2026 Ky. Acts ch. 80 (PDF) (checked October 14, 2026)
• Kentucky Board of Alcohol and Drug Counselors: Temporary CADC instructions (PDF) and LCADC instructions (PDF) (checked October 14, 2026)
• U.S. Bureau of Labor Statistics, OEWS May 2025, SOC 21-1018: Kentucky and national estimates (checked October 14, 2026)
• CARF: ASAM Level of Care Certification (checked October 14, 2026)
• ASAM: Level of Care Certification (checked October 14, 2026)
• CARF: Find a Provider (ASAM Level of Care filters) (checked October 14, 2026)
• DEA Diversion Control Division: Dear Registrant letter, January 12, 2023 (PDF) (checked October 14, 2026)
• SAMHSA: Naltrexone (checked October 14, 2026)
• Kentucky Board of Nursing: Advisory Opinion Statement #43, subanesthetic ketamine (PDF) (checked October 14, 2026)
• KRS 314.042: APRN prescribing, CAPA-CS (checked October 14, 2026)
• 902 KAR 55:110: KASPER reporting (checked October 14, 2026)
• 21 CFR 1308.13(c)(7), via Cornell LII: Schedule III, ketamine (checked October 14, 2026)
• U.S. FDA: Spravato prescribing information and Medication Guide (PDF) (checked October 14, 2026)
• Greater Louisville Medical Society resolution 2026-31 to the Kentucky Medical Association House of Delegates (secondary, cited only for its own statement): Resolution on corporate and private equity owned practices (PDF) (checked October 14, 2026)
• Kendall v. Beiling, 295 Ky. 782, 175 S.W.2d 489 (Ky. 1943), full opinion via CourtListener: Kendall v. Beiling (checked October 14, 2026)
• CHFS OIG: KASPER reporting requirements (checked October 14, 2026)
• KRS 222.429: Patient brokering prohibited and 2024 Ky. Acts ch. 68 (PDF) (checked October 14, 2026)
• 18 U.S.C. 220, via Cornell LII: Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories (checked October 14, 2026)